Can We Please Stop Referring To High-Income People As Rich?

It’s gotten pretty out-of-hand.  The common man has always equated “high income” with “rich.”  This is patently absurd, but you can’t blame most people for thinking it.  After all, if you see a high-income doctor or lawyer driving a brand-new Porche off the lot you’re going to assume he’s a wealthy individual, never mind the fact he had to take out a two extra mortgages on his gargantuan McMansion in the suburbs to come up with enough cash for a down-payment.

But the rich have always known better.  The world’s truly rich citizens have always known that accumulated wealth, not income, is what makes a wealthy person.  Sure, a high net worth can be used to generate a high annual income, but it’s the wealth that matters.  Without it, a high-income, high-spending consumer is nothing more than a hamster in a cage.

It used to be that politicians knew this perfectly well, owing to the fact that most of them were incredibly wealthy in their own right.  Heck, they still know it.  But in this age of mass communication and populist hysteria, the truth has taken a back seat to what actually matters to the ruling elite:  getting re-elected.

And How Do You Get Re-elected?

This is simple: you promise to punish the greedy, evil rich people who the public (wrongly) perceives as getting us into this mess.  This would be a great plan, politically, except significantly raising taxes on America’s richest citizens (measured by net worth) has the disadvantage of potentially slowing economic growth, increasing unemployment, and generally pissing voters off.  You’d be pissed off too if you didn’t have a job.  Now I realize raising taxes on the rich might not actually discourage job-creating investment and that there’s a lot of controversy surrounding this position, but I think it’s more likely to be true than not.  And besides, it doesn’t even matter if raising taxes on the rich harms the economy because, since enough people in charge believe it will, they will resist doing it if they don’t have to.

CRAP! The easiest way to buy votes is to tax the evil rich.  But by doing so, it’s possible you might harm the economy, costing you many more votes in 4 years.  So what’s a politician to do?  Easy!  Prey upon the public’s ignorance and appear to tax the rich without actually doing so.  High-income individuals are the most logical target for this.  After all, most of them spend a good percentage of their time wasting money on lavish, overpriced consumer goods in an effort to catch up to the Joneses, who spend even more lavishly to keep up with the Smiths, who spend more lavishly still.

You can get away with targeting these super-consumers because a.) people always like to see The Man fall and b.) their spending, while substantial on a relative basis, is small enough on an absolute basis that lowering it won’t significantly harm the economy.  So you raise taxes on those earning more than $250,000 per year like Obama plans to do all the while avoiding placing an undue burden on America’s truly wealthy elite.  I can’t think of a quicker or easier way to buy a few million votes, personally.

Wake up people.  High-income does not equal rich.  High-net-worth equals rich.